MARKET REPORT: BAE Systems fueled by ongoing global conflict

British defense giant BAE Systems was one of the biggest risers in the FTSE 100 yesterday as the sector was boosted by geopolitical tensions.

On a quiet day for the London market, BAE's share price rose 0.6 percent (6.5 pence) to 1,102 pence after a report showed its order book had risen by around £7 billion in a year.

Increased global hostilities and ongoing conflicts have increased defense spending.

The order books of the world's largest defense companies have soared to near-record highs and MSCI's global benchmark for the sector's shares has risen 25 percent in the past 12 months.

The war in Ukraine partly explains the increase, but companies such as BAE Systems are also supported by new orders for existing contracts.

The report showed that BAE's order book rose from £48.5 billion to £55.5 billion in 2022. And orders reached a record £66 billion in the first half of this year.

Meanwhile, mining shares also rose after copper prices rose 1.36 per cent to 8,690.5p yesterday.

Anglo American's share price rose 0.5 percent, or 9 cents, to 1,984.8 cents, while Antofagasta fell 0.2 percent, or 3 cents, to 1,707.5 cents.

Glencore's share price fell 0.4 percent, or 1.7p, to 470.1p. Rio Tinto shares rose 0.6 percent, or 35p, to 5,860p.

Other risers included AstraZeneca, which continued to make profits thanks to a £950 million deal to buy Shanghai pharmaceutical company Gracell Biotechnology, announced on Boxing Day.

The drugmaker's share price rose 0.4 percent, or 46p, to 10,574p, while rival pharma giant GSK also rose 0.8 percent, or 11.6p, to 1,461.2p.

The FTSE 100 index of blue chip shares fell 0.03 percent, or 2.2 points, to 7,722.74p, while the mid-cap index FTSE 250 fell 0.01 percent, or 1.6 points, to 19,719, 16.

Stock Watch – Zanaga iron ore

Shares of Zanaga Iron Ore rose after the company unveiled a deal to power its project in the Republic of Congo.

The agreement has been signed with China Machinery Engineering Corporation (CMEC).

CMEC will complete inspections at sites near Zanaga and prepare proposals on how the hydrodams will be financed.

Iron ore prices have picked up steam in recent weeks as confidence increases over the prospects for Chinese steel demand.

Shares rose 17.3 per cent, or 1.5p, to 10.3p.

On Wall Street, the Dow Jones rose 0.2 percent, while the S&P 500 also rose 0.2 percent and the Nasdaq rose 0.3 percent.

Meanwhile, the pound was trading at $1.276 against the dollar.

Oil prices fell about 1 percent after falling almost 2 percent the day before as major shipping companies returned to the Red Sea.

Danish company Maersk said it has planned container ships to sail through the Suez Canal and the Red Sea.

A temporary shutdown was imposed this month after attacks by Yemen's Iran-backed Houthi militia.

The move to bring the route back into service has “eliminated some immediate concerns about supply issues”, said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Shell's share price fell 0.3 percent, or 7p, to 2,549p. BP shares fell 0.4 percent, or 2 cents, to 465 cents on lower oil prices.

“The market is likely to try the upside again… perhaps early in the new year, based on expectations of a recovery in fuel demand thanks to monetary easing in the United States,” said NS's Hiroyuki Kikukawa Trading, part of Nissan. Effects.

British housebuilding shares fell on fears the Bank of England will be slow to cut interest rates in 2024.

A cautious approach would keep mortgage costs higher for longer.

Barratt Developments' share price fell 0.7 per cent, or 4p, to 562.4p, Land Securities shares fell 1 per cent, or 7.2p, to 716.4p and Berkeley fell 0.4 per cent, or 20p , to 4,737p.

Streeter said: 'Housebuilders are on the back foot amid signs that consumers are still showing signs of resilience in their spending habits during the post-Christmas sales.

'The Bank of England is showing more caution than the Fed about the inflation trajectory, so any sign that rates in Britain could stay higher for longer is not good for the housing market.'

On the London AIM market, chip manufacturer Sondrel was the biggest decliner. Shares fell 53.7 percent after a £1.7 million contract delay led to cash flow problems.